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Ford Motor Company Essay

3032 words - 13 pages

Ford Motor Company

Billie Warren

OMM 692: Organizational Management Strategy

Adrienne Osborne

January 14, 2013

Executive Summary-
Ford Motor Company (Ford) has been a leader in the auto industry, however, over the past few decades has continued to lose market share to foreign competition. The current weak United States economy combined with rising fuel prices and increased political pressures regarding global warming, presents several challenges to Ford and the entire auto industry. These current challenges provide exciting opportunities for the auto company who must reduce cost, get fresh capital, and quickly develop and produce, new efficient, economic autos, ...view middle of the document...

Ford has significant fixed costs and large capital investments are needed. Cash flow is the lifeblood of any business and should be considered in every decision which could impact the company expenses. The reduction will be invested in new plants in growing markets; fund the research required, development, and production of alternative vehicles. The global auto industry market is growing, and the opportunity for Ford to recapture market share lost in the past few decades is there for the taking. Ford can win, and to do so needs to expedite change to meet the challenges and seize opportunities. Ford needs a sense of urgency regarding revising a strategic plan that incorporates the next generation of vehicles, reduces cost, and expands in the world growing markets. In today’s global economy and highly competitive auto industry Ford has no time to procrastinate. Ford has just too much at risk in not planning a new strategy and become an industry leader in alternative fuel technology. Its present strategies can be summarized as; more resource driven than market driven, managed control, more global than local. Centralized strategic leadership and decentralized policy implementation (Scribd.com).
External analysis-
Strengths-
• Timely acquisition of capital makes Ford more financially sound than the other big three carmakers.
• Product line is respected by industry experts and is qualitatively seen to be a step above many of its competitors. Recent surveys place Ford in a tie with Toyota for greatest customer satisfaction, a significant improvement from five years ago.
• Have a global market presence, with worldwide brand recognition and a particularly strong presence in Europe.
• Is perceived to be a thoroughly “American” brand, which helps Ford among certain groups of consumers.
• U.S. market share, after years of decline, has stabilized in recent years.
• The Ford F-series pickup remains the most respected commercial truck available; despite demand shifts, profitability on this line should remain high.
• Ford has had great success, particularly when compared to its competitors, at renegotiating labor contracts with the UAW.
Weaknesses-
• Poor Profitability: Ford still loses money on many automobile lines, particularly within the United States.
• Importance of single components source.
• The automotive market is highly competitive with large fixed costs. In addition, the market demands continual long term planning and research and development.
• Very little market penetration within China and India.
• Global excess capacity for the automobile industry is estimated to average 30.5 million vehicles per year from 2009-2011.9
• Ford is selling a durable good during the most severe economic downturn in recent history.
Opportunities-
• Ford has recognized the importance of small, fuel efficient vehicles and is actively transitioning into this market. Of particular...

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